SEI's Best Sales Year Ever Is Real. The Retreat From Mexico Is the Tell.
A pure fee earner hits a record stock price on record sales events — and quietly books a $32.5 million charge to walk away from the international half of its wealth roll-up.
SEIC · Earnings Call · 2026-10-21
A fee earner in a quarter that was all about deposits
Look at the market's keyword board for the September quarter and you would think every company in America had turned into a bank. Retail deposits, hiking cycle, Fed rate hike, seasonality in deposit — the top of the global list is a funding-cost board. Scroll the reporters who filed in the last five days and you get two dozen regional banks (FITB, HWC, KEY, WAL, ZION, MTB, SMBK, BOKF) asking some version of the same question about deposit pricing, NIM and loan betas. And yet the single highest-momentum keyword across the whole cross-section is Fee earner, sitting at the very top. SEI Investments is the purest expression of that second thing. No loan book, no deposit franchise — revenue comes from fund administration, wealth-platform outsourcing and asset management. So while the banks spent October explaining deposit seasonality, Ryan Hicke opened with a different kind of record: “with a full quarter still remaining in the year, we have already exceeded the highest level of full-year sales results in the history of the company” — Ryan Hicke · 2026-10-21. The tape agrees. SEIC has run +21% over the last 90 trading days in an almost uninterrupted line, printing an all-time high. This is not a broken story being repaired; it is a working story being repriced.Sales landed; revenue is still queuing
Q3 delivered revenue growth of 14%, adjusted operating profit growth of 25% and adjusted EPS growth of 24% — with adjusted EPS now nearly 50% above where the company sat two years ago. Net sales events of $47 million were the second-highest quarter in SEI's history, and the composition was gratifyingly boring: $32 million from Investment Managers (roughly 90% driven by alternative asset managers), $13 million from private banking, and asset management plus $2 million inside advisors offsetting a $2 million institutional outflow. The last filed quarter gives you the shape underneath: revenue of $642 million, up 15% year over year, with a 35.9% gross margin and a 39.5% operating margin that is close to the company's own all-time high. Hicke's claim that "adjusted operating margins remained near record levels" and that this "was not driven by some short-sighted cost-cutting initiative" holds up. Where the story gets more interesting is where the money is going. Effective net cash has fallen to $504 million, down 50% year over year from a $1.1 billion peak in early 2022. SEI bought back $215 million of stock in Q3 at an average of $105 a share, added $800 million of new authorization, and told investors to expect a similar Q4 pace. The buyback is no longer a residual use of cash; it is a policy.The thing nobody asked about: NSC
Buried in the GAAP reconciliation, and never probed by a single analyst on the call, was this:Less than a year after closing the Stratos partnership — the deal that justified the entire U.S. wealth-roll-up strategy — SEI paid $32.5 million to exit the one international piece of it. And the language shifted to match. Asked directly about the U.S. versus international strategy, Hicke's answer was a quiet retreat: “Today, the Stratos footprint, Patrick, is predominantly U.S. … the rest of the business is all domestic.” — Ryan Hicke · 2026-10-21 That is a meaningful omission in a company that spent 2025 and 2026 describing itself as a global platform. The Stratos advisor economics remain fine on their own — $23 million of revenue, $11.5 million of EBITDA up 17% sequentially — but the geographic ambition inside that deal has been written down. It is the sort of thing that shows up in the numbers before it shows up in the narrative.GAAP net income was reduced by $32.5 million recorded in other expenses related to our mutual agreement with Stratos to terminate the planned acquisition of NSC, its Mexican RIA.
What management stopped leading with
Read the keyword history and the shift is visible. Last quarter the top of SEI's own board was Data Cloud (ranked first), retail alt and transfer agency — product-launch language. This quarter those themes are still in the script, but they have ceded the marquee to enterprise capability, new logos and existing clients. The sales pitch has moved from "here is a product" to "here is a transformation." Some of that is genuine. Sneha Shah put the client conversation well: “They're actually saying, "What are you building that we don't have to?"” — Sneha Shah · 2026-10-21 And the new transfer agency business — the wedge into retail interval funds — is real but small, and management was careful not to oversell it:$600,000 a deal is a long way from the $10 million run-rate target, and vastly shorter than Phil McCabe's ambition last quarter to “take away larger funds from competitors because no one likes their transfer agent” — Phil McCabe, Executive Management Team Member · 2026-07-22. This is a 2028 story being told in 2026 language.The first one went live on August 3rd. We have other ones live now … I think the $10 million number will be a little bit light. The first deal was about $600,000.